Finance (No. 2) Act 1992

5 (1) Sub-paragraph (3) below applies to any disposal of an asset which is effected, and sub-paragraphs (4) to (6) below apply to any lease which is granted, in pursuance of a provision included in the transfer scheme by virtue of Article 70(1)(c) of the Order (scheme may require successor company to enter into arrangements in favour of any other successor company).

(2) Sub-paragraph (3) below also applies to any disposal of an asset which is effected in pursuance of an agreement under paragraph 3(2) of Schedule 10 to the Order and which is either the grant of a lease of land or the creation of other liabilities and rights over land.

(3) A disposal to which this sub-paragraph applies shall be taken for the purposes of corporation tax on chargeable gains to be effected for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the successor company making the disposal.

(4) Section 38(1)(a) and (4) of the Taxes Act 1988 (rules for ascertaining duration of leases) shall be disregarded in determining for the purposes of section 11 of the M1 Capital Allowances Act 1990 (long leases) whether a lease to which this sub-paragraph applies is a long lease within the meaning of that section; in relation to any such lease which is, on that basis, such a long lease—

(a) the lessee shall be deemed for the purposes of that section to have paid in consideration for the grant of the lease a capital sum of an amount equal to the residue of expenditure immediately before the lease takes effect, computed in accordance with section 8 of that Act, and

(b) section 11(6)(a) of that Act shall be disregarded;

and sections 157 and 158 of that Act shall not apply in relation to the grant of a lease in respect of which, by virtue of this sub-paragraph, an election is made under section 11 of that Act.

(5) Where the conditions in paragraphs (a) and (b) of subsection (1) of section 55 of the M2 Capital Allowances Act 1990 (expenditure incurred by incoming lessee: transfer of allowances) are fulfilled in relation to a lease to which this sub-paragraph applies—

(a) the lessee shall be deemed to have given as consideration for the lease a capital sum which falls to be treated for the purposes of Part II of that Act as expenditure on the provision of the fixture concerned;

(b) the amount of that capital sum shall be equal to the amount of expenditure which is attributed to the fixture concerned for the purposes of apportioning, in accordance with the transfer scheme, expenditure by reference to which capital allowances may be made; and

(c) subsection (4)(a) of that section shall be disregarded.

(6) Section 38(1)(a) and (4) of the Taxes Act 1988 shall be disregarded in ascertaining for the purposes of section 35 of that Act (Schedule D charge on assignment of lease granted at an undervalue) the duration of a lease to which this sub-paragraph applies.

(7) Subject to the repeals made by the M3 Taxation of Chargeable Gains Act 1992, in section 68(7A) of the M4 Finance Act 1985 (modification of indexation allowance: list of no gain/no loss provisions) there shall be added after paragraph (i) the words “and

(j) paragraph 5(3) of Schedule 17 to the Finance (No. 2) Act 1992.”

(8) Subject to the repeals made by the M5 Taxation of Chargeable Gains Act 1992, in paragraph 1(3) of Schedule 8 to the Finance Act 1988 (rebasing to 1982: list of no gain/no loss provisions) there shall be added after paragraph (i) the words “and

(j) paragraph 5(3) of Schedule 17 to the Finance (No. 2) Act 1992.”

(9) Section 35(3)(d) of the Taxation of Chargeable Gains Act 1992 (assets held on 31st March 1982: list of no gain/no loss provisions) shall have effect, and be deemed always to have had effect, with the omission of the word “and" at the end of sub-paragraph (vi) and the addition after sub-paragraph (vii) of the words “and

(viii) paragraph 5(3) of Schedule 17 to the Finance (No. 2) Act 1992.”

Marginal Citations

M1 1990 c. 1.

M2 1990 c. 1.

M3 1992 c. 12.

M4 1985 c. 54.

M5 1992 c. 12.